Philex shares decline on dim profit outlook

Reuters

MANILA, Philippines - Shares in Philex Mining Corp. fell as much as 6.2 percent after the country's top miner said its 2012 net profit will likely drop 7 percent with its main gold and copper mine to remain closed possibly for the rest of the year due to leaks first discovered last month.

Philex fell to as low as P14.86 in heavy trade, with 6.7 million shares changing hands, nearly double their average trading volume over the last 90 days. The broader market was largely flat.

The stock, hovering near a 17-month low, has lost 24 percent this year, the second-worst performer in a market that gained 21 percent.

In a taped interview shown at an annual mining conference late on Thursday, Philex Chairman Manuel Pangilinan said net profit this year was estimated at between P1.5 billion and P1.7 billion ($36 million-41 million) against P5.8 billion last year.

Philex, controlled by Hong Kong-listed conglomerate First Pacific Co Ltd, is struggling to contain tonnes of mine wastes that leaked from its tailings pond due to continuous rains last month. Some of the tailings spilled to a major river in northern Philippines.

The government was looking to impose fines of around P1 billion for the waste leaks, Environment and Natural Resources Secretary Ramon Paje said last week.

The company has said it would suspend its gold and copper exports from September as a result of the mine closure.